Payers Seek to Integrate SDoH & Social Service Payments

Acceptance of social determinants of health (SDoH) to improve medical outcomes and reduce costs caring for people in disadvantaged populations was a long time coming. For example, the impact of personal behaviors related to smoking, diet, and exercise that emerged in the 70’s faced skepticism – and even lobbying – until the 1990s. Eventually, researchers and clinicians were able to convince policymakers and payers of the SDoH variable in good health.

Since the SDoH healthcare delivery concept has finally been accepted in the past decade, the second phase of SDoH adoption – payments – has advanced at a more robust pace. Managing SDoH results is now central to the redesign of healthcare reimbursement delivery models.

“If the healthcare industry does not consider social determinants of health, the industry will continue to ignore a major influence on patterns of health and health care utilization,” said Matthew Davis, MD, MAPP, interim chair, department of pediatrics, Ann & Robert H. Lurie Children’s Hospital of Chicago and Northwestern University Feinberg School of Medicine…“While those (analytics and measurements) will continue to be important going forward, the leaders in the healthcare industry will be the ones who are able to distinguish themselves by understanding social and environmental influences on child and adult health—and acting to address them in partnership with patients and providers.”

Social Service Providers Gain Prominence as Payment Models Evolve

Today it’s understood that up to 80 percent of the factors that impact health care are related to the conditions in which people live. SDoH factors include social, economic, health behaviors, and other environmental influencers, such as food scarcity, housing scarcity, and violence. Just last month (February 2020) Health Affairs published a study titled “Upstream With A Small Paddle: How ACOs Are Working Against The Current to Meet Patient’s Social Needs.” The authors conducted the study motivated by their observation that “little progress has been made in integrating social service with medical care.”

This is likely to change sooner than later. With value-based payments, which compensate providers for health outcomes rather than volume under historic fee-for-service payments, providers and payers are moving closer to being in synch in the SDoH arena. A February 2020 survey conducted by Change Healthcare that both providers and payers are moving in the right direction – but with some differences.

The survey of 445 healthcare leaders nationwide found that providers are focused on addressing public health issues such as vaping and the use of controlled substances. Payers, on the other hand, are keyed in on income disparity, housing, and improving health literacy. Payers also expressed more focus on incorporating value-based initiatives into their financing models.

In another indication of the growing awareness of the link between SDoH and its impact on better outcomes and lower costs, the health Policy Payment Learning & Action Network, value-based care programs, such as Accountable Care Organization (ACOs) release strong support for SDoH-driven payments. The group found that in the 2019 report that 36 percent of U.S. healthcare dollars were rooted in alternative care models (including SDoH), a 34 percent increase over the prior year. Further, SDoH related alternative payments accounted for a 23 percent increase in payments from 2015 to 2017.  Some 90 percent of those surveyed expect the percentage of SDoH and valued-based strategies to continue to increase.

In its coverage of the report, Fierce Healthcare noted:

One of the ways that value-based care programs achieve greater value is by addressing the social determinants of health (SDOH) that have not been adequately addressed by traditional care programs…. Value-based programs often seek to improve patient adherence to care by targeting SDOH. There has been a range of efforts to this effect.  Some creative initiatives have been adopte, such as meal plan programs for members, health plans forming partnerships with food banks, or even plans buying vacant apartment buildings to provide stable housing.”

Analytic Platforms Key in Advancing SDoH Financing Reform

In an April 2019 white paper issued by McKinsey & Company titled “Addressing the social determinants of health: Capturing improved health outcomes and ROI for state Medicaid Programs,” the authors noted the importance of an analytical platform in support of a value-based SDoH strategy. The authors cited three advantages to an analytics platform:

1: Align SDoH efforts with strategic objectives: Many efforts to address SDoH start with a proposed solution for a specific determinant—for example, a housing or food security program.  However, such interventions may have too broad a target…advanced analytics incorporating SDoH Social Determinants of Health data can help identify beneficiaries who may have underlying SDoH issues that are contributing to poor outcomes and increased emergency department or inpatient costs.

2: Determine how outcomes will be improved and costs reduced through SDoH interventions: Metrics related to investment/ operational costs, healthcare spending, and impact on outcomes (both short- and long-term) are often not robustly tracked, leading to vague estimates of care quality and financial impact

3. Design effective interventions: The uptake and effectiveness of interventions can be increased if state agencies work with local stakeholders (including beneficiaries, providers, community organizations, academics, and policymakers) to design programs that reflect their needs and assets, and then deploy the programs in a manner that will engage targeted individuals (e.g., by using the right channels, messaging, and incentives).


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